Will I Be Taxed on My Used Boat Seller’s ‘Repair Allowance’ Discount?

I recently purchased a 38 foot motoryacht through a yacht broker. The boat had a number of mechanical problems but was otherwise in good condition, and I went ahead with the purchase after the seller agreed to reduce the price. The broker accounted for the credit using a “repair allowance” form rather than by simply reducing the purchase price. I am now preparing the paperwork for my payment of use tax to the California Board of Equalization, and I’m concerned that my tax obligation may be calculated on the higher amount, since the original “purchase price” was not affected by the repair allowance. How should I handle this? Let’s start from the top before getting into our reader’s specific question.             Most yacht purchases are subject to sea trial and survey, and if the buyer discovers a problem during that inspection process, the parties often re-open negotiations. These negotiations may lead to a number of different outcomes, depending on the nature of the problem, the size of the transaction, the motivation of the respective parties and a host of other variables.             First, it’s important to note that the seller has no obligation to work with the buyer to...